Universal Music Group’s board has rejected the $64 billion takeover bid from Bill Ackman’s Pershing Square Capital Management.
The unsolicited and non-binding proposal is “not in the best interests of UMG, its shareholders, artists, songwriters, employees and other stakeholders”, according to the board’s statement.
After review with the assistance of outside financial and legal advisors, the board has rejected the proposal because it “fundamentally and materially undervalues UMG and will not deliver superior value creation”. The board added that there is consensus among UMG’s shareholders and other stakeholders supporting that decision.
Pershing had wanted UMG to dispose of its Spotify equity holdings.
The major subsequently announced plans to monetise half of its Spotify equity stake, and announced it would provide the market with enhanced financial disclosure so that its business can be better assessed and understood.
“These are topics the board and management have been considering for several months, and which will remain under continuous review,” said the statement.
We remain committed to leading the industry by attracting the world’s top talent, deepening fan engagement globally, and driving innovation
Sir Lucian Grainge
Sherry Lansing, chairman of the board, UMG, said: “UMG has built an unrivalled position in the music industry through clear vision and strong execution. The board has full confidence in Sir Lucian and his team’s ability to deliver sustainable growth and continued value creation for all stakeholders.”
Sir Lucian Grainge, chairman and CEO, UMG, said: “We remain committed to leading the industry by attracting the world’s top talent, deepening fan engagement globally, and driving innovation. Central to that mission is fostering an environment that champions human creativity, protects artists, songwriters, and entrepreneurs, and expands opportunities for growth and success.
“As we execute our strategy and deliver maximum long term value, we look forward to providing shareholders with greater insight into the drivers of our performance and future direction of our business.”
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